THE INDIAN AVIATION

SECTOR
H&GH MANSUKHAN INSTITUTE OF MANAGEMENT-ULHASNAGAR

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KAPIL & GROUP...
 Acknowledgement
We would like to Thank
Professor
Mrs.Bhavna Mam
for giving such a opportunity
&
for her consistent help.
KAPIL & GROUP...
 GROUP MEMBERS
Kapil I.
(16)
Kavita H Praveen
.(14) S. (54)

Poonam Shweta
H. (13) J. (18)

Anirudh Sonam
S. (51) K. (20)

Amit P. Pooja L.
(39) (27)

Harsha Seema
T. (58) S. (53)
Varsh J.
KAPIL & GROUP...
(17)
 Contents

BY VARSHA J.
HISTORY

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SOLUTIONS

BY SONAM K.

KAPIL & GROUP...

 Contents

BY KAPIL I.
ANAYLYSIS
S.W.O.T.

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BY POONAM H.

KAPIL & GROUP...

 Contents
OLIGOPOLY

BY KAPIL I.

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LOGO
IMPORTANT FACTS

BY ANIRUDH S.

KAPIL & GROUP...

 HISTORY
 First Bird Land in Indian in the year of 1912
Route Between KARACHI To DELHI
By Indian State Air Services

 Birth of Indian Airlines in Year 1932

By TATA Airline (By JRD TATA)

 In 1994 Indian Airlines taken over by VAYUDOOT

 Rising of TITANS

a) Rise of Monopoly
b) Nationalization (1953)
c) Air Taxi Scheme (1986)
d) In 1994 Corporation was repealed

KAPIL & GROUP...

 GROWTH STAGE (turning point)
1. OPEN SKY POLICY-LIBERALISATION

2. REPEAL OF CORPORATE ACT

3. RISE IN NO OF PASSENGER & CARGO TRAFFIC

4. PLAYERS IN DOMESTIC MARKET

GO AIR-THE PEOPLE
AIRLINE ESTABLISHED IN
2004,PROMOTED BY
WADIA GROUP,INITIAL SPICE
SPICE JET-
JET- LOW
LOW COST
COST AIRLINE
AIRLINE
FLIGHTS IN SOUTHERN BEGAN
BEGAN IN MAY 05 ENTERED
IN MAY 05 ENTERED WITH
WITH
AND WESTERN RS
RS 95
95 FARES
FARES FOR
FOR FIRST
FIRST 99
99
DAYS
DAYS OFFER
OFFER LOW
LOW EVERYDAY
EVERYDAY
SPICY
SPICY FARES AIM-COMPETE
FARES AIM-COMPETE WITH
WITH
INDIAN
INDIAN RAILWAYS
RAILWAYS
KAPIL & GROUP...
 GROWTH STAGE (turning point)
6. COMPARATIVE MARKET SHARE OF DOMESTIC
MARKET

7. PLAYERS AFFECTING OVERSEAS MARKET

(DOMESTIC & INTERNATIONAL)
KAPIL & GROUP...
 Problems
 Shortage of Key Airports

 Lack of Infrastructure facilities at airports

 Lack of maintenance facility at airport

 Controlling in the hands of political leaders

 problems of staff shortage

 Intense competition by domestic & international players

KAPIL & GROUP...

 To overcome problems
 To improve the services provided by IA and AI

 To revitalize the promotion mix

 To prevent poaching problem

 Enhancing the quality

 To bring IA and AI together to create powerhouse

 To consider privatization of the two airlines

 To improve the financial conditions of AI and IA

KAPIL & GROUP...

 S.W.O.T. ANALYSIS
• Quality services • Under penetrated market
• International Market
• Strong Brand Value &
• Problems of Air Cargo
Reputation • Low Earnings
• Quality & Continues
Innovation
Strengths weakness

Opportun-
threat
ities

• International Market
• Untapped Cargo Market • Increasing fuel prices
• Problems of Domestic • Infrastructure issues
Market • Competitors

KAPIL & GROUP...

 S.W.O.T. ANALYSIS
STRENGTH

• Strong brand value and reputation in the minds of

customers.
• Quality of the service.
• Quality and Continuous innovation.

WEAKNESSES

• Low Earnings.
• Under Penetrated Market .
• High ticket pricing
• Facing a tough competition from competitors.
KAPIL & GROUP...
 S.W.O.T. ANALYSIS
OPPORTUNITIES
• The expanding tourism industry.
• The non penetrated domestic market.
• International market.
• Untapped air cargo market.

THREATS
• Competitors
• Infrastructure issues.
• Fuel price hike.
• Shortage of Airports
• Promotions and sponsorship declining.

KAPIL & GROUP...

 P.E.S.T. ANALYSIS
 ACRONYM
 P-Political
 E-Economic
 S-Social
 T-Technological

 Political:-The airline industry is very susceptible to changes in the political

environment.
 Economic-Business cycles have a wide reaching impact on the airline industry

 social:- In a country like India, there are people from varied income groups. The airlines
have to recognize these individuals and should serve them accordingly.

 technology:- Improving the infrastructure and services at these airports.

Setting up of new international airports
Installing a lamination machine to laminate the luggage of travellers
KAPIL & GROUP...
 Recession
1. The U.S. economic recession impacted on Indian aviation
industries

2. Lay offs of jobs

3. India is 2nd Largest Loser after US Worldwide

4. Effect on Domestic Market

5. Cargo Traffic decreased by 13%, Passenger Traffic by 5.7%

and Airlines Revenue declined by 12% or $63 billions

6. Air India (The Maharaja) accumulated losses of Rs. 7000/-

Crores & Debt Exceeding by Rs. 16,000/- Crore

7. Hit by recession, KingFisher sacks 300 employees

KAPIL & GROUP...

 Recession
8. Kingfisher Airlines, IndiGo & SpiceJet had accumulated losses of Rs. 2,444/- Crores in 2007-08 while
In 2008-09 they suffered loses of Rs. 10,000/-

9. JetAirways had to lease out 7 of its 10 Boeing 777-300ERs to survive the financial crunch. It also had
to sell a brand new yet to delivered Boeing 777-300ER

10. In October,2008 Jet Airways Led off 1900 of its employees

11. Globally In 2008, AirChina’s Net Loss of 9.3 Billion Yaun, Singapore Airlines Limited the
Worlds 2nd Carrier by Market Value, had Net Loss of USD 213 Millions.

12. In 2006 due to increase in Aviation Turbine Fuel (ATF) prices, Rising Labour Cost & Shortage of Skilled
Labour, Intense Price Competition and Entry of New Players in Aviation Market Resulting in heavy
losses to the existing players.

KAPIL & GROUP...

 The 4 PS…

PRODUCT
 Currently the kingfisher airline operates the aircrafts like the airbus A
320, A 319-100 and ATC-72.
 After acquiring the Deccan kingfisher has started a new fleet known as
kingfisher red.

KAPIL & GROUP...

 The 4 Ps…

PLACE
 Covers even the toughest terrains in the country, and the services ranges
from Ahmadabad to Agartala and to the major cities such as Delhi,
Bangalore, and Chennai etc.
 The main strategy that kingfisher follows is to target the metro cities or the
tier 1 cities in India.

PROMOTION
 There are many events and advertisements through which kingfisher
airlines is promoted.
 There are multiple touch points and finer promotional services working for
the promotional activities.
 Loyalty and frequent flyer programs are also carried out.
KAPIL & GROUP...
 The 4 Ps…

PRICE
 The price segments that kingfisher targets is the higher income group as
well as the upper middle class background.
 There are a few segments that are majorly for the youth and the high
lifestyle segments.
 Sec A, sec B+ socio economic class mainly in the age group of 25-45 years
are the main segments for which there is a specific prices offered by
kingfisher.
 Some of the services offered by kingfisher do emphasis on their policy to
target those segments whichKAPIL
are willing to pay for luxury.
& GROUP...
 Merger & acquisition
 MERGER OF AIR SAHARA AND JET AIRWAYS

 a deal to buy out Air Sahara for Rs 1,450 crore (Rs 14.50 billion)

KAPIL & GROUP...

 Merger & acquisition
 MARAN'S ACQUISITION OF
SPICEJET

 Picked up 37.75% in low-cost

carrier Spice Jet at Rs 47.25 per
share amounting to Rs 750 crore.
Maran will make an open offer for
20% at around Rs 57 per share

 The BSE benchmark index Sensex

had risen 142 points to end at
17,064.95 points

KAPIL & GROUP...

 Oligopoly
 An oligopoly is a market form in which a market or
industry is dominated by a small number of sellers
(oligopolists).
Kingfisher + Jet
 Market share of = 49 %
 Code Sharing Agreement
 Cartelization
 Price influencing
 HHI value – 19.87 % (Herfindahl-Hirschman Index or HHI)
 Kingfisher enjoyes profit of 16,422.06 lacs
 Spijet getting benefit of 61.5 crores
 Fleet owned by kingfisher is 66
 Spice Jet owned 95 fleets KAPIL & GROUP...
Oligopoly

KAPIL & GROUP...

 Future take-off
 Modernization of airports

 Policy on airport security

 Employment opportunities
 Commercial pilots
 Co-pilots
 Training instructors
 Cabin crew and many more

KAPIL & GROUP...

 Future take-off
 The ministry of civil aviation would handle around
 280 million passengers by 2020

 Increase in GDP over 8% & expected to rise future

 Entry of many pilot players

 Avoid full course meal, give snacks

 Remove the flights from low frequency routes

KAPIL & GROUP...
 Some important facts
1. The Indian aviation industry is one of the fastest growing aviation industries in the world.the
government’s open sky policy has led to many overseas players entering the market and the industry has
been growing both in terms of players and number of aircrafts.

2. Today, private airlines account for around 75% share of the domestic aviation market.

3. India is the 9th largest aviation market in the world. Due to enhanced opportunities and international
connectivity 69 foreign airlines from 49 countries are flying into India.

4. India ranks fourth after US, China and Japan in terms of domestic passengers volume. Domestic airlines
flews 3.67 million passengers in 2009. The center for asia pacific aviation (CAPA) forecasted that
domestic traffic will increase by 25% to 30% in 2010.

5. In terms of international cargo handlers at all india airports the industry witnessed an annual gowth of
12.8%.

6. Further there has been an increase in tourist charter flight to india with around 686 flights bringing
1,50,000 tourist.

7. This increase growth is because major full service carriers have converted around half their capacity into
low-cost services,which has resulted in bringing down he average fares of airlines as a whole by about
30% and thereby increasing demand from the domestic passenger market.
KAPIL & GROUP...
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 Conclusion-Economic env.

The rise in the income level along with introduction of no frills flights will lead to:-
• Rise in no. of travelers,
• More investment in aviation, KAPIL & GROUP...
• More competition etc.
 suggestions
 Reduce Labour Cost

 Simplify Flight Operations

 Get smart on fuel

 Offer more transparent pricing

 Put expenditure on infrastructure and development

& training of employees
KAPIL & GROUP...
 …

LOG
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DASVIDANAYA
KAPIL & GROUP...